Fashion Business Tip: Commission vs Salary… Which is the Better Option for Your Tailors?! (Updated 2019)

Fashion Business Tip: Commission vs Salary… Which is the Better Option for Your Tailors?! (Updated 2019)


This question is one many designers always have a headache about as it deals with money matters.  While many of us shy away from it, it is one major problem everyone has. I’ll limit what I have to say to the one question most designers who run production units ask at every event, every seminar and pretty much at every opportunity:

 

“Should I pay my workers per piece or should I put them on a salary?”

 

THAT is the million-dollar question and here is my take on it even though when I revisited the subject of producing for designers, we have a policy which I will share at the end of the post.

Naira exchange

edited from http://3.bp.blogspot.com/–sbGZ0lpdEg/Ui01xntdosI/AAAAAAABeHU/K_w-RApHe9c/s1600/naira-dollar.jpg


Before I begin, first let me say there is no right or wrong answer to this question.  What is more important is knowing which option works for you and your operations.  I’ll point out the pros and cons and use my experience as an example.

When I first ran a production unit, I had no clue what the going rate for anything was.  So like everything else in my entrepreneurial journey, I learnt the hard way.   When I started, I was advised to pay per piece… which of course is what everyone means when they say “commission”.  “That’s what everyone does around here” I was told.  So I went with the “norm” against my better judgement.  Why did I say against my better judgement?  

Well… I knew the obvious structure that worked was a type of “division of labour” system where one person on a production line sewed a a portion of the garment rather than the whole garment.  But how would a commission payment work if I wanted to run a production line?  How would I calculate the pay per person?  And would it be fair to punish everyone else for the incompetence of one person in the line?  (Which is actually what I do now even though I don't do commission...)

But anywayz, since I knew this was what the general consensus, I chose to try out the commission structure.  After all… that is what seemed to work around here, and I thought those running that option were doing pretty well… or so it seemed…

Did it work for me?  NOPE!  Far from it.  In fact, that was a HUGE mistake!

Not only did the machinists keep ruining my work, getting them to redo bad work was like asking them to jump in a lake!  Not only could the looks melt wires, the “inner” grumbling and their attitudes were so bad, it was completely discouraging for me as a business owner.

And to be honest, could I really blame them?  Nope.  In their minds, who cared if the stitches were not straight?  To them, the customers would not notice.  All they were interested in was churning out the work and getting paid so all my complaints fell on blank looks and deaf ears.  And to be fair… they did have families to feed… No that is not an excuse… but to them what they had done was good enough, the customer could wear it so what’s my stress?  To them, as long as we delivered the clothes, all those stories of straight stitches and perfect zips were all just a bunch of grammar.

So what was the “real” implication or opportunity cost of their bad work and my commission payment?  

Simple!  All my personal hours which could have been better spent on more productive work, marketing or simply relaxing was spent working late into the night unpicking bad stitching and zips and repeating the clothes.  This also meant I was burning more of my resources, mostly my fuel, redoing work that should have been delivered.  So the payment to the tailors and the petrol burnt earlier that day was a total waste of my money!  I might as well have have fired them and sewn the clothes from scratch.  

SO when this didn’t work, I switched to salary payments.


And yes!  The image pretty much captured how I felt at the end of every month when I started salary payments.  I faced a different kind of headache.  Well I must say the quality of work was a bit better… and yes the “bit better” in the tiniest text possible is intentional.  The work was better but blimey…  short of stopping work and snoring right at the machine… each garment took at least 3 days to complete… some a week!  It was just ridiculous!  

To them, well… she wants good work, we’ll spend 3 days giving her what she wants.  After all we get paid at the end of every month.  But guess who was incurring all the costs!  The costs of delayed delivery to the client, disappointments, the costs of petrol, the salary payments and of course, not mentioning the opportunity costs.  So I traded a bad situation for another one.

BUT one thing I must say was at least, I didn’t have to unpick and redo the clothes as much which was better but I had to sit and think about which option worked better for me.

Eventually, I settled for the salary payment.  Only later when I stopped sewing for people did I realise that it should have been a blend of both… i.e. a basic salary which would ensure you don’t cry to the bank at the end of every month and some commission as a reward for good work.  And I tried it and it worked for the few jobs I did.

Shame I had to learn this the hard way…

Since then, I have advised people to opt for a bit of both.  Though some ask me for actual figures, truth is, it really is difficult to say since we do not have a standard pay structure in the industry.  But whatever system you choose needs to be based on an agreement which the employee will sign before s/he commences work.

For example, when you employ a machinist, you can agree on a certain figure say N30,000 but split the N30,000 into 2 parts – a basic say N20,000 monthly pay and the additional N10,000 spread over the number of days.  If you expect him/her to complete a garment in a day, he loses that portion of the extra N10,000.  That way, you don’t feel cheated, and he works hard to complete the work so he gets the extra N10k.  BUT note that late-coming should come out of the N20k basic because there is no reason why s/he should come late to work.

It might be easier said than done but when I tried it, it worked and I was able to breathe easier.

Truth is, the subject of dealing with employees and salary payments is a tough one, and you will constantly be faced with the scenario below:

http://www.businesscartoonshop.com/media/catalog/product/cache/1/image/350×350/185c2993af677842ae94e5dda12f0e6e/t/h/this_is_file_name_2767.jpg


…but you ultimately have to decide which option works for you.

Before I sign off, I’d like to address the issue of “Oga ta, oga o ta, ise alaru a pe”.  The first time I heard this phrase, I had no clue what it meant until my assistant explained it to me.  To those who do not speak Yoruba, it basically means “either the business makes money or not, the employee gets paid”.   The implication of this statement?  Well, it simply means if there is no business, the employee does not get paid.

I hear some designers have this policy with some of their workers.  Personally, I think this is pretty unfair if the machinist is not involved in marketing or sourcing for work.  I know that I personally will never agree to these terms if getting the business in is not part of my job description….which I guess would explain why those who include this in their policies will have issues with their machinists leaving.

For me, I have found that salary payments make me work harder when I know people are dependent on me at the end of the month to feed their families and pay their bills.  It challenges me to get my act together because I now I have to pay salaries.  Granted at the end of the month they are smiling to the bank and I am crying to the bank, but at least it forces me to work harder and hustle, even if for nothing else, to pay my staff.

Honestly, designers should not make their employees suffer or put them on a commission payment simply because it minimises their risk.  If you cannot afford to keep someone on permanently due to shortfalls in revenue, then please vary their employment terms and make them come in once or twice a week.  They lose out both ways if they have to come to work and yet don’t get paid because you haven’t done the needful.  And honestly, they will keep leaving or even opt for other production units.

And please respect your staff.  You cannot deduct their money or not pay them for unfinished work if they spent half of their day washing your clothes or picking your child up from school.  I have heard some designers do this and I am completely shocked!  There really should be a distinction between work and your personal errands.  And if you merge the 2, then please put them on a salary.  You really can’t eat your cake and have it!

tip


POST UPDATE:


So when I revisited the subject of starting a production unit for ready to wear designers, Garment Production House, I decided on, not only a monthly salary, but also getting accommodation for my staff not too far away. Yes it still has its challenges but here are 2 things I do that perhaps help you as well save some money in the event of the tailor leaving unceremoniously.


1.  During the interview process, I inform them that for the first 3 months I will deduct a certain amount of their salary.  If they stay for one year, they get it back in full, if they leave they forfeit it.  Has it helped?  In a way.  Those who left during the year (and I did have some people leave), forfeited the amount and honestly, I did not feel as burnt.  At least there was some financial savings to me.


2.  I have recently implemented a policy that everyone in the production house bears the costs of someone's error or lateness.  This refers to unpicking clothes, not our own set deadlines, etc.  At the end of the month I take out these amount which also results to some form of cost savings.  Truth be told, I don't deduct as much as I should because really, these people have families but I deduct just enough for them to feel the pinch and it seems to work.  Plus now that everyone's pay is deducted, they all now act as a check on each other to minimize errors. 


Great!  That’s all I have to say.  Hope this helped.  Let me know what you think in the comments section.

Recommended Resources

A Passionate Plea to Fashion Designers Part 1

A Passionate Plea to Fashion Designers Part 2

Growth Tip: Outsource to grow your fashion business

About Me

Tope Williams-Adewunmi

Tope Williams-Adewunmi

A fashion entrepreneur passionate giving power through fashion

by sharing knowledge guaranteed to help fashion lovers

turn their love for fashion into a viable business.

Someone you know needs this article.  

If this helped you, help them out by sharing this article on social media.

To get notified about our articles, please sign up below:


Fashion Business: Tips for Starting Your Fashion Business on a Lean Budget

Fashion Business: Tips for Starting Your Fashion Business on a Lean Budget

Starting a fashion business with very little capital is very challenging, but it can be done.⁠  Sometimes having too much starting capital can be a bad thing, it gives the early illusion of success and leads to wasteful processes and business practices. ⁠


I remember when I first started out.  Many people believed in my vision and of course I had lots of support from friends and family who wanted to support my dream.  A year down the line, I was out of cash!  When I thought back to what I spent the money on, it seemed to be on things that did not directly relate to revenue. It was more about 'branding' - and I use the word very loosely.  I spent money on things that, in hindsight, did not seem to matter then such as having the perfect website, employing staff I did not need, spending money on business cards that cost so much but was never delivered and other things.  ​

broke and desperate


When I was about to start over, I cried to my parents for help (well not literally) and asked them not to give me the money but to loan me the money.  That was the best thing I could have done for myself.  And luckily for me, my parents were quite shrewd.  I had to pay the money back in instalments when it was due. 


It made me 'hustle' because I knew I had to pay back money at a certain time.  It made me think, strategize, spend money only when it was necessary and create new products and services.  Lucky for me, all the excess staff I had left for one reason or the other.  The interns went back to school, the Corps member completed her service, the tailor who was misbehaving then got suspended and never showed up at the end of his suspension, and little by little it all paid off.  I watched my costs like a hawk, spending money only when absolutely necessary, bargained like there was no tomorrow and learnt to prioritize my spending. Little by little, it all paid off.

start up with no money


By starting lean, you'll be more likely to maintain disciplined financial practices as your business grows. Here are six tips that’ll help you start your fashion business on a lean budget.⁠

1. Don't spend money without thinking about how that money is going to grow your business.⁠
2. Keep your business and personal account separate.⁠
3. Don't assume you have to buy everything for your business, rent or lease if possible.⁠
4. Hold off on opening a physical space unless you absolutely have to.⁠
5. Don’t hire unless absolutely necessary.⁠
6. Outsource.⁠

suggestion

One other thing I would add is that financial help from friends and family does not have to be financial in nature.  You can ask for a donation of physical assets instead.  I remember when setting up the office, my father gave me some office chairs, 2 desks (which I thought was old-school then but looked absolutely fabulous when I ran out of cash) and he also gave me a generator which I really needed, my mother donated 2 ACs when she noticed I did not default on my repayments, my friend also donated an AC, I was vocal on Facebook about things I needed and people who had these gave them to me.  Money, at the end of the day is only useful for its intrinsic value so if I could get the things I needed, then chances of spending the money on things that did not really matter were really slim.


My advise to you is that if you're going to start with very little capital or start a business at all, you need to plan carefully and conserve all the cash you can.⁠  Cash is the lifeblood of every business.  Without it, your business will crumble because you will be unable to pay for goods, services or even your utility bills like electricity or staff salaries, if you have any.

 

Did you start your fashion business on a lean budget?  Share your experiences in the comment section, we’ll love to hear from you.⁠

Recommended Resources

How to Start a Fashion Business with No Money

Commission vs Salary... which is the better option for your tailors?

Want to Earn extra income sharing valuable knowledge? 

What to start a fashion business?

About Me

Tope Williams-Adewunmi

Tope Williams-Adewunmi

A fashion entrepreneur passionate giving power through fashion

by sharing knowledge guaranteed to help fashion lovers

turn their love for fashion into a viable business.

Someone you know needs this article.  

If this helped you, help them out by sharing this article on social media.

If you love our posts and want to get notified when new posts come up, please sign up below:

Fashion Business: How to Start a Fashion Business with No Money

Fashion Business: How to Start a Fashion Business with No Money

So you are probably curious to know how possible it is to start a fashion business with zero money right? The truth is anything is possible when you put your mind to it.  I started 2 successful businesses (well successful in their own way in terms of revenue and client base) without a kobo.  How did I do it?!  

2 words:  

1. Collaboration!

2. Sheer Hard Work! (ok pretend this is one word though it’s more of a phrase…)


Which businesses were these?!  Jewellery Sales & “Gift Consulting”.  Both of which I stumbled upon by accident just by doing what I loved doing… helping people out!


I’ll tell you my story…  


The Jewellery Business

jewellery business

When I was working, many of my colleagues loved my jewellery and yes I loved HEAVY jewellery!  Whenever they asked me where I got my stuff from, I always referred them to the lady who sold them to me.  I would even go the extra mile to make the calls and set up a meeting with the lady.  At some point I thought to myself…. “Hang on!  This lady is making so much money from my referrals, why not take the orders and get compensated for it, even if only for the stress I go through and my phone bills”.  And that was how Aunty Juliet and I became partners.  


I took stuff off her, added my tiny bit, sold it to friends and family, paid her for what I sold,  returned stuff I didn’t sell back to her and kept my tiny bit.  And I tell you… I made a “comfortable killing”, not from the individual items but from the volume of sales ?


So why did I stop this?!  I went off to fashion school!  And when I returned, despite many calls from her to revive the collabo, I refused and chose to focus on my business.


The Gift Consulting Business

Gift business

NOW the “gift consulting” was a hobby that became a business.  I loved shopping  and eating out at restaurants (still do…) and when I was working, I used to be the go-to person for various things.  From birthday presents for mothers and girlfriends, to the ideal spot to take a potential girlfriend, I knew it all.  In fact, I would go as far as planning even the item on the menu the guy should order to impress the girl without going broke (because I had the price lists in my head) and even what to say and when to say it!  I was a master planner.  For the gifts, I went out and bought and packaged the stuff myself.  And you know what?!  Most times…if not all the time… I got raving reviews on either the gifts or the “meals”.


So yet again!  Something went off in my head.  I thought to myself… “Hang on! Why not charge for this, even if just a tiny bit to cover my petrol costs and phone bills“.  And bam… people never batted an eyelash when I started charging for it.  


For my 1st major project, Valentine’s Day, my client base grew from 13 in the first year to over 30 in the 2nd year (and that was not counting the orders during the year).  And before I knew it, I was making another “comfortable killing” from the volume of orders.  A lot of work but I enjoyed every stressful minute of it!


And it continued… even while I was in South Africa.  Orders were just a phonecall away.  I would package stuff and get them delivered.  Strangers called me based on referrals, paid the money into my account and I would get it all sorted.


So why did I stop?!  The business was growing at a fast pace and yet again I decided to suspend it so I could focus on my fashion business.  


So what am I saying?!  

You can also start your own fashion business without spending a dime of your money!  How?!  Focus on being the middleman between your client and your tailor.  You really do not need so much funds except you want to go into retail only.  Your client can fund your business!  And even with ready to wear.  with a successful product pre-launch, your clients can fund the production of the ready to wear.  And it validates your theory that you are providing what the market wants.  And it also worked for me!  I bought my first set of machines from the money a client paid me for a set of outfits.   


What I realize from speaking to so many designers is we focus too much on the paparazzi and “branding” when we should be focusing on setting up proper business structures!  Most of us want to launch with a bang and are, therefore, more concerned about PR, fashion shows, branding, professional photoshoots, etc when we do not have products!  How can you focus on branding when there is no product to brand!


What happens when you get 50 orders for your product?!  Can you conveniently produce them?!  If you can and have the funds, sure why not?!  But if you do not, then please start from somewhere and take baby steps!  I know this all too well because I also made the same mistake!  But I woke up to reality and not a moment too soon!   


How to start a fashion business 

with little or no money?!  

Start a Fashion Business with No Money

Set up proper processes in your micro-establishment.  Work on your sketches, find a good local tailor / production house, do your proper costing of direct and indirect costs, approach your clients with your sketches and get them to choose from YOUR designs rather than hand you a magazine to copy from.  


I have often found out that most people hand out magazines simply because they do not want to take a risk on a design they would not like but when you have your sketches, you can agree with them on a perfect design for them.  That is what I used to do when I used to sew for people and it worked!


So please start small if you don’t have excess funds and before you know it, you’ll grow from scarce to plenty in no time!  It is a long journey to success but if you start off on the right track, you will get there sooner than you think.

How do I find Customers?

how to find customers

Another question many people which is quite simple. Start with your phone! Network with people and store up favours.  If it worked for me, it can also work for you!  Get friends to do stuff for you for free.  And you know what, never be too proud to beg!  I know it doesn’t cost me anything to get on my knees and grovel if need be.  You don’t need to be a door mat but be humble enough when you have your eyes on a certain goal.


So how can Martwayne assist you start your own business on a lean budget?  I am working on various projects targeted at assisting designers get their businesses off the ground and will launch them as soon as next week. But you can start with getting the required knowledge you need to run a successful fashion business. Our Online Fashion Entrepreneurship Course teaches the step by step guide to starting and growing your clothing line and you can register wherever you are in the world. It will help you with your costing and pricing, the questions you need to ask, how to track your finances using an accounting software and how to build structures in your fashion business.

I’ll leave you to digest this much for now… Hopefully it has got you thinking.  

Determination

I tell you, all it takes is determination, a can-do attitude… and of course a LOT of prayers!  Thankfully, all 3 are absolutely free!    So please!  Stop waiting for someone to believe in you and invest in you!  A wise person once told me people do not invest in individuals but invest in clear visions and business ideas and processes.  That changed my view about a lot of things.  You need to start looking beyond your passion and start seeing yourself as a business and look for ways to succeed in your business!


I had a fashion advisory session recently and it was an eye opener for her.  She suddenly realized that there is soooooo much to do and the work has just begun.  And you know what?!  She believed it was money well spent!  Before you start buzzing me, please note that I charge for my sessions.  I had to to stop free sessions because it was draining and my business was suffering.  So if you can, book and pay for an advisory session with me before the session. I am happy to point you in the right direction.  All it takes is one click on the Whatsapp button and we are good to go!


Here’s wishing you all an excellent week and hoping you put your thoughts into action!  I look forward to hearing from you.  Drop me a comment in the comments section if you have more ideas or if this was helpful.


Cheers!

Recommended Resources

Fashion Business Idea:  How to Start a Ready to Wear Clothing Line

Debunking the various myths about fashion design and the industry

Start & Run a Successful Fashion Business

About Me

Tope Williams-Adewunmi

Tope Williams-Adewunmi

A fashion entrepreneur passionate giving power through fashion

by sharing knowledge guaranteed to help fashion lovers

turn their love for fashion into a viable business.

Someone you know needs this article.  

Help them out by sharing this article on social media.

To get notified about our posts, please sign up below:

× Whatsapp Us